Writing by Aerin Atinsky
Artwork by Aeneas Eaton
Buying a home is usually the largest purchase you’ll ever make, and the happiness of walking into a home designed to your personal taste is unparalleled. But how do you get from point A to point Z as seamlessly as possible?
If you’ve purchased a home before, and even if you haven’t, you likely know the basics: determine where you want to live, hire a realtor you trust, learn what you can afford, agree on your non-negotiables and know what seasons are best for your particular search.
But what about the other, less obvious pieces of the home-buying puzzle? Specifically, when should you speak with a mortgage broker and attorney?
Here’s what you need to know.
Get your finances together
Before you begin your search, set yourself up to be the ideal buyer by getting a handle on your finances. That means steady employment (at least two years), a good credit score (around 700), and keeping your liabilities to a minimum.
“Pay off credit cards, don’t take out big car payments, be aware of any student loans, etc.,” says Robert Alberga, president and owner of RFA Capital Corp. “Banks have ratios that need to be met. Most banks like your debt-to-income ratio to be at 45 percent, with 55 percent being the max. This means that your total liabilities, including the proposed mortgage, cannot exceed around 45 percent.”
Next, obtain your credit score (all three credit agencies will give you one annually, free of charge) and work to improve it if necessary.
“A credit score determines the interest rate you get on your mortgage, and the interest rate determines the amount of mortgage you can qualify for,” explains Joseph Scutieri, a real estate attorney with offices in Pound Ridge and White Plains. “That determines the house you can get. Credit is very important, as every bank uses a credit score to determine approval.”
Line up your specialists
Before you begin your house hunt, find your mortgage lender.
“The biggest question a lender asks is, ‘What’s the borrower’s ability to repay the debt?’” explains Alberga.
If things check out, the lender will send you a pre-approval letter. This confirms you’re a serious buyer; most sellers won’t let buyers view their house without one.
“This means the lender determines how much of a loan you can get, how much savings you have, and exactly what price house you can afford,” Alberga explains.
Then, before you make an offer, hire a real estate attorney.
“If you engage me after you’ve won the bid and done your inspection,” says Scutieri, “you miss out on my advice with negotiations and perhaps repairs to request from the seller after the inspection comes back.”
Additionally, your attorney will highlight potential closing costs, which Scutieri says a lot of buyers fail to consider.
“For example, New York’s mansion tax puts a one percent tax on any house over $1,000,000,” he explains. “So, if you haven’t budgeted for those additional funds, you’ll be very surprised to know they’re in your closing costs.”
Your secret weapon
Placing an offer on a house can be a bit like applying to college or a job, so make sure you’ve done all you can so your application stands out from the crowd.
For example, writing a letter about why you deserve the home and how you’ll treat it can make all the difference.
“I’ve seen the most sincere, heartwarming letters you can imagine about raising children and the type of life they want to build in that home,” Scutieri says. “It really tugs on the seller’s heartstrings. So much so that I’ve seen situations where sellers accepted the $10,000 less offer just because of a letter.”
Hopefully, your gut-wrenching letter did the trick. If not, it’s not over just yet.
“A good realtor doesn’t take no for an answer,” contends Scutieri. “They’re going to say, ‘What will it take for you to consider my client’s offer?’ They won’t just move on to the next house.”
Alberga suggests that, if you can afford it, increase your offer.
“But, if all else fails and another offer is accepted, tell the seller to put you next on the list in case the deal doesn’t go through,” he recommends.
The final steps
After approval, your realtor will draw up a deal memo with all the pertinent details of the sale. Then, your attorney will write the contract, and you’ll meet to review everything.
“This contract is the entire agreement between you and the seller,” says Scutieri. “If you walked through the house with the seller and they said, ‘Oh, you like that patio furniture, and you want the TV brackets to stay? I’ll throw them in,’ then that must be in the contract.”
Once all the i’s are dotted and the t’s are crossed, you’re ready to close on your new home. And if the process seems overwhelming, remember that shopping for a home can be exciting and fun—just watch any “Selling Sunset” or “House Hunters” episode for proof.
Finally, no matter what, “delegate your stress to your realtor—that’s what they’re getting paid for,” Scutieri recommends. “Have a cup of tea and relax. Pay your stress away!”
This article was published in the March/April 2024 print edition of Connect to Northern Westchester.
